Software Monetization Featured Article

The business world has changed significantly in recent years.

New competitors have disrupted markets. Customers have become more demanding. Product release cycles have accelerated. And smartphones and other connected devices are everywhere.

Software helped create all this change. And software is the means through which businesses can adapt to this change.

And that’s a good thing – especially for companies that are in the business of selling hardware solutions. In fact, as Gemalto notes in its new Infographic-  software is powering a hardware renaissance.

By shifting from a hardware- to a software-centric business model, a company can become more cost-efficient, responsive, and prosperous. Here’s how.

• Cost-efficient: It’s far less expensive to upgrade a hardware device with a software update than it is to engineer, manufacture, and deliver an entirely new box. So software both lowers costs, and enables companies to more easily reach new customers and markets.

• Responsive: It’s a lot faster to do that with software too. Now companies can get new features to their customers in a shorter period of time. And sometimes these new features mean new revenue streams.

• Prosperous: So there’s that. Plus, companies can employ software and connectivity to understand the health of their hardware in the field. And they can use that to learn how customers are using their solutions. This knowledge can enable companies to expand their product portfolios with new revenue-generating services – such as proactive maintenance on their hardware or the ability to sell their equipment on a subscription- or usage-based basis.

Gemalto (News - Alert) says 86 percent of those it surveyed said driving diversity in hardware with software features was the top driver of their transition to this new business model. Eighty-four percent said the ability to do remote feature upgrades was key driver of their shift on this front. The same share said they did it to improve customer experience. Meanwhile, 79 percent said flexibility to adapt to market and 76 percent said better control of copy protection were there key drivers on this front.

Whatever the key drivers, it’s clear that businesses need to get moving now digital transformation has disrupted every business market. So to survive and thrive, businesses are joining the digital transformation – and embracing software-centric strategies is a big part of the change.

It won’t be easy, of course. Businesses will have to do a lot of work to develop the strategies and the talent to make the shift. And they’ll have to adopt new solutions, including software licensing and monetization platforms.

But that’s what it will take to stay competitive in this business environment. Indeed, 84 percent of businesses Gemalto surveyed said they are already in the process of changing to software-driven business models.

And those new models are already paying off. According to Gemalto, shifting to a software strategy yields an average revenue increase of more than 11 percent.

To access the survey, click here